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Antitrust & Competition InsightIn association with Hogan & Hartson LLP

In association with:

June 2008

Contents

Foreword

Divestiture trustees: an unusual result that parties should work hard to avoid Page 3

The effect of Rambus on antitrust standards for standard-setting organizations Page 6

Regional round-ups Page 10

Corporate Express & antitrust in Europe Page 13

Should parents always pay for their children’s infringements in cartel cases? Page 16

Live deals timetable Page 20

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Foreword

Welcome to the tenth edition of the Antitrust & Competition Insight – brought to you by mergermarket in association with leading international law firm Hogan & Hartson LLP.

The report that brings you an update on the key deals and

issues affecting M&A activity in North America, Europe

and beyond. We hope that this quarterly newsletter will

provide corporate, advisory and investor readers with timely,

informed and objective intelligence. In addition, the Antitrust

& Competition Insight leverages off mergermarket’s sister

company dealReporter – bringing you a listing of live deals

sitting with the regulatory authorities in North America, Europe,

Asia and Emerging Europe, Middle East and Africa (EEMEA).

In the first article Joseph Krauss discusses his role as

divestiture trustee in Mittal Steel’s disposal of Sparrows Point,

a US steel making facility in Maryland. On page 6, Thomas

Leary discusses the effect the Rambus case could have on

antitrust standards for standard-setting organizations. The

usual mergermarket round-ups of the most significant antitrust

situations across the globe can be found on page 10.

Also in this edition of the newsletter Ben Bschor,

dealReporter’s regulatory correspondent, looks at the antitrust

implications surrounding the Corporate Express/Staples deal;

this can be found on page 13. In the final article on page 16,

Michel Debroux discusses group liability in EU antitrust rules

and analyses whether parent companies should always pay for

their children’s infringements in cartel cases.

We hope you find this latest edition of interest. Please email

Katie Hart at [email protected] with any feedback you might

have.

Philip C. Larson Catriona Hatton Practice Group Director & Chairman Practice Group Director Washington D.C. Brussels

John Pheasant Sharis Arnold Pozen Practice Group Director Practice Group Director London/Brussels Washington D.C.

2 – Antitrust & Competition Insight © mergermarket 2008

I have just completed my service as the divestiture trustee in

U.S. v. Mittal Steel Co. N.V., No. 06-01360 (D.D.C. 2007) one

of the most interesting projects on which I have worked in my

24 years as an antitrust lawyer. In my 11 years at the Federal

Trade Commission, I was involved in over twenty matters in

which the parties entered into a consent decree that required

a divestiture. Almost all of these decrees included a provision

for the appointment of a trustee if the parties were not able

to complete the divestiture within a certain period of time. In

none of these cases, however, did the parties fail to divest

the assets in question prior to the deadline. As a result,

while I had ample experience negotiating the terms of the

trusteeship, I was never able to observe the consequences

of these terms. In fact, because the trustee provisions in

consent decrees so rarely become operative, I suspect that

neither the enforcement agencies nor the parties spend as

much time thinking about and negotiating these terms as

they should. Having now lived through a hectic nine month

stint as a divestiture trustee, and seeing first hand how much

the language of the trustee provisions mattered, I will never

overlook this section again. And you should not either.

The Merger of Mittal and Arcelor and the Events Leading Up to My Appointment

On January 27, 2006, Mittal Steel Company N.V. (“Mittal”),

one of the world’s largest steel producers, announced

its intention to launch a hostile tender offer to acquire

Arcelor S.A. (“Arcelor”), another of the world’s largest

steel producers, for approximately $23 billion in cash and

securities.1 Mittal Steel simultaneously announced an

agreement to sell Arcelor’s Canadian subsidiary Dofasco Inc.

(“Dofasco”) for approximately $5 billion to ThyssenKrupp

AG (“ThyssenKrupp”).2 Arcelor initially resisted the hostile

takeover, but after Mittal increased its tender offer to

approximately $33 billion in May 2006, the Arcelor Board

agreed to recommend Mittal Steel’s offer to Arcelor’s

shareholders.3

On August 1, 2006, the United States, represented by the

Antitrust Division of the Department of Justice (“DOJ”), filed

a complaint in Federal District Court seeking to permanently

enjoin the acquisition.4 Simultaneously, DOJ filed a Proposed

Final Judgment (“PFJ”), which represented a settlement

between the parties.5 Upon the conclusion of the procedures

specified by the Antitrust Procedures and Penalties Act, 15

U.S.C. § 16(b)-(h) (the “APPA”), the Final Judgment proposed

by DOJ (“FJ”) was entered by the court on May 23, 2007.6

DOJ’s concern about the acquisition related to its impact on

the market for tin mill products in the eastern United States.7

According to DOJ, the market for tin mill products in the

eastern United States was already highly concentrated with

two firms, one of which was Mittal, accounting for 74% of

all sales.8 It concluded that the acquisition of Arcelor and

Dofasco, which collectively accounted for an additional 6% of

sales, would “likely [ ] facilitate anticompetitive coordination

among the two major Tin Mill Products manufacturers.”9 DOJ,

however, also concluded that the divestiture of Dofasco to

ThyssenKrupp would resolve these concerns and therefore

agreed to allow the acquisition provided that this divestiture

was completed.10

Unfortunately for the parties, during the period when the

acquisition was hostile, in an attempt to make the acquisition

more difficult, Arcelor’s Board transferred legal title to the

shares of Dofasco to an independent Dutch foundation known

as a “stichting.”11 The effect of such a transfer was to render

it extremely difficult and time-consuming under Dutch law for

a third-party to take title to the Dofasco shares. As a result,

the FJ included a contingency requiring Mittal, if it were unable

to divest Dofasco, to instead divest one of two integrated steel

plants in the eastern United States that included a tin mill.12

These two facilities were located in Weirton, West Virginia and

Sparrows Point, Maryland.

Divestiture trustees: an unusual result that parties should work hard to avoid

1 Complaint at 3-4, U.S. v. Mittal Steel Co. N.V., No. 06-01360 (D.D.C. Aug. 1, 2006)

2 Id. at 4.3 Id. at 5.4 See Complaint. 5 Proposed Final Judgment, U.S. v. Mittal Steel Co. N.V., No. 06-01360

(D.D.C. Aug. 1, 2006)6 Final Judgment, U.S. v. Mittal Steel Co. N.V., No. 06-01360

(D.D.C. May 23, 2007)

7 Competitive Impact Statement at 8-10, U.S. v. Mittal Steel Co. N.V., No. 06-01360 (D.D.C. Aug. 1, 2006) (“CIS”).

8 Id.. at 8. 9 Id. at 9.10 Id. at 10-11.11 See Complaint at 4-5. 12 See Final Judgment at 11.

© mergermarket 2008 Antitrust & Competition Insight – 3

Joseph Krauss writes about his experiences over nine months as divestiture trustee in US v Mittal Steel.


As it turned out, these provisions of the FJ became relevant.

In November 2006, the stichting blocked the sale of Dofasco

to ThyssenKrupp and ThyssenKrupp’s efforts to compel

the sale of Dofasco were rejected by a European court in

January 2007.13 As a result, on February 16, 2007, DOJ,

having determined that a divestiture of Dofasco in the time

permitted by the FJ was impossible, designated Mittal’s

facility in Sparrows Point, Maryland (“Sparrows Point”) as the

alternative asset to be divested by Mittal.14

At this point, Mittal was required to divest Sparrows Point

within a 90-day period, which could be extended by DOJ for up

to 60 days.15 If Mittal failed to accomplish such a divestiture

during this period, the FJ provided that DOJ could appoint

a Trustee to do so.16 After expiration of the initial 90-day

divestiture period, DOJ granted three separate extensions

totaling 60 days and the Court granted an additional 15-day

extension to August 6, 2007.17

On August 1, 2007, Mittal, by then known as ArcelorMittal

(“AM”), entered into an agreement to sell Sparrows Point

for $1.35 billion to a joint venture that ultimately became

known as “E2”.18 Because the transaction could not close

immediately, and because the agreement was subject to

certain conditions and regulatory approvals, DOJ exercised its

right under the FJ to appoint a trustee.19 I was appointed on

August 8, 2007.

The Trusteeship

Initially, because AM and E2 had already reached an

agreement, my duties were basically limited to monitoring

and reporting on the parties’ progress toward achieving the

necessary regulatory approvals and meeting their respective

closing conditions. For reasons that are currently in dispute20,

however, the sale to E2 was never consummated and on

December 16, 2007, the agreement between E2 and AM was

terminated.

Suddenly, I found myself at the center of a major transaction,

but the FJ set forth only the most basic guidelines as to how I

was to accomplish the task, including:

• “[O]nlythetrusteeshallhavetherighttosell[Sparrows

Point].”21

• “Thetrusteeshallhavethepowerandauthorityto

accomplish the divestiture to an Acquirer acceptable

to [DOJ] at such price and on such terms as are then

obtainable upon reasonable effort by the trustee . . . .”22

• “[T]hetrusteemayhireatthecostandexpenseof

defendant any investment bankers, attorneys , or other

agents, who shall be solely accountable to the trustee,

reasonably necessary in the trustee’s judgment to assist in

the divestiture.”23

• “[T]hedivestiture...shallincludetheentirebusinessand

assets of [Sparrows Point], and shall be accomplished in

such a way as to satisfy [DOJ], in its sole discretion that

[Sparrows Point] can and will be used by the Acquirer as

a viable, ongoing business engaged in producing Tin Mill

Products.”24

• “Thecompensationofthetrustee...shallbereasonable

in light of the value of [Sparrows Point] and based on a fee

arrangement providing the trustee with an incentive based

on the price and terms of the divestiture and the speed with

which it is accomplished, but timeliness is paramount.”25

• “Defendantshallnotobjecttoasalebythetrusteeonany

ground other than the trustee’s malfeasance.”26


13 See Memorandum of Points and Authorities in Support of Motion of the United States to Appoint Trustee, U.S. v. Mittal Steel Co. N.V., No. 06-01360 (D.D.C. Aug. 6, 2007).

14 See Motion and Memorandum of Plaintiff United States in Support of Entry of Final Judgment, U.S. v. Mittal Steel Co. N.V., No. 06-01360 (D.D.C. Apr. 20, 2007).

15 See Final Judgment at 11.16 Id. at 14.17 See Memorandum of Points and Authorities in Support of Motion of the

United States to Appoint Trustee at 3.

18 Id.19 Id. at 4.20 ArcelorMittal USA, Inc. v. Esmark, Inc., No. 08-601403 (N.Y. 2008)21 See Final Judgment at 14. 22 Id. 23 Id. 24 Id. at 13. 25 Id. at 15. 26 Id.


So, essentially, I had significant discretion as to how to sell

Sparrows Point so long as I sold it to an entity capable of

operating it as an ongoing business. I was charged with

simultaneously obtaining the best possible price and terms

for Mittal and carrying out the DOJ’s goal of effectuating the

divestiture as soon as possible. As to how to balance these

two goals, I had no guidance other than the “timeliness is

paramount” language, which was oddly in reference to how

the trustee compensation incentives were to be structured.

Ultimately, I was able to accomplish the divestiture as

contemplated in the FJ. On March 20, 2008, Severstal North

America, Inc. (“Severstal”), a major integrated steelmaker

agreed to purchase Sparrows Point for $810 million, and it did

so on May 7, 2008. Although the sale price was significantly

lower than the price to which E2 agreed in the previous

Summer, I believe that the sale process resulted in the best

price and terms reasonably obtainable at the time.

Avoid a Divestiture Trustee

Notwithstanding the fact that the divestiture was

accomplished pursuant to the FJ, the clearest lesson I learned

from serving as a trustee is that a divestiture trustee should

be avoided by the merging parties at almost any cost. This

means that merging parties must carefully consider the

trustee provisions when negotiating a consent decree. To the

greatest extent possible, parties should attempt to negotiate

as long a period as possible prior to the appointment of a

trustee. In addition, parties should seek to enumerate as

many contingencies as possible under which the appointment

of a trustee could be delayed. Even if the trade-off for avoiding

a divestiture trustee is agreeing to a “hold separate” provision

and the appointment of a trustee to operate the assets to

be divested, it should be considered. The reason is simple:

once a divestiture is turned over to a trustee, the seller loses

control over all aspects of the process, from the timing to the

manner in which the bidding process is conducted to the law

firm and bankers to be hired to the relative value of non-price

terms. With respect to each of these issues, a trustee can do

its best to protect the interest of the seller, but the reality is

that the Trustee is also obligated to consider other factors such

as scheduling a closing date as soon as possible and selecting

a buyer with as high of a likelihood as possible of closing on

schedule.

A second reason to avoid a divestiture trustee is that it

can become very expensive. Typically trustee provisions

contemplate that the trustee will hire corporate and regulatory

counsel at the merging parties’ expense. As a result, the

parties typically bear the cost of two complete teams of

lawyers, the trustee’s and their own. In the context of a very

large transaction, such as that between Arcelor and Mittal,

these additional costs may be relatively minor, but in a smaller

transaction, they could be very significant.

Aggressively Negotiate the Trustee Provisions in a Consent Decree

Notwithstanding the relatively small chance that a divestiture

trustee will be appointed pursuant to any given consent

decree, parties would be wise to negotiate the details of the

trustee contingency as aggressively as possible. For example,

parties should:

• Seektoenumerateareasonabletimelinefortrusteetosell

the assets on the best terms.

• Seekanexplicitbalancebetweentrustee’sdualobjectives

of selling the asset as quickly as possible and obtaining the

best price and terms. This would empower the trustee to

extend the sale process if they believed that doing so would

increase the sale price.

• Seektheabilitytoobjecttothesaleongroundsotherthan

trustee’s malfeasance such as on the basis of the existence

of unusual market conditions that have resulted in a sale

price significantly below that which might be reasonably

obtained within one year.

Undoubtedly, the antitrust enforcement agencies will push

back on efforts such as those outlined above, and ultimately

some or all may not be obtainable. At the time parties

are negotiating a divestiture, however, they typically have

some negotiating leverage because the alternative for the

enforcement agency is the risk of litigation. Therefore, parties

should use whatever leverage they have to negotiate favorable

trustee provisions.

By Joseph Krauss and Jonathan Grossman, Hogan & Hartson LLP, Washington


Standard-setting has a long antitrust history. The activity,

by definition, involves a collective effort to influence the

selection of winners and losers in the competitive struggle,

so the antitrust concerns are obvious. At the same time, it

is equally obvious that this collective action can help ensure

the safety and the efficacy of products offered for sale. So, a

series of antitrust cases have established that standard-setting

activities are permissible, but must be conducted in a way that

is transparent and based on objective criteria, under a system

that does not weight the scales against innovative newcomers

in favor of established companies who may control the

process.

In recent years, antitrust concerns have arisen from another

direction. In certain high-tech industries, in particular, the

establishment of a standard has the potential to confer actual

monopoly power on a single technology because everyone in

the industry has to adapt their own products to accommodate

it. (A low-tech analogy would be the standard configuration of

electrical sockets and plugs).

If the company with the technology selected had deceived the

standard setting organization about its patent position before

the selection was made, it could be said to have acquired

a monopoly by methods that are just as improper as more

familiar predatory tactics. The potential harm caused by this

“hold-up” problem is obvious. In a sense, the antitrust issues

have migrated from concern about abuse of innovators by the

standard-setting group to concerns about abuse of the group

by innovators.

Different standard-setting organizations have adopted various

strategies to protect themselves against a patent “hold-up,”

and the strategies are not always successful. In the ongoing

Rambus case, the Federal Trade Commission (FTC) found in

2006 that Rambus had unlawfully monopolized the market

for certain memory technologies by a course of deceptive

conduct in violation of the rules of JEDEC, a standard-setting

organization. This opinion of the Commission was reversed in

April 2008, by the U.S. Circuit Court in the District of Columbia.

The reversal is a major setback for the FTC, and it has already

moved for rehearing in the Circuit Court. This article will

discuss some flaws in the Court’s opinion that bear on the

likelihood that these further efforts will succeed, but it will

also consider the question of whether the ultimate outcome

in Rambus will really have a significant effect on the future

conduct of standard-setting bodies.

The Rambus Case

The FTC asserted that JEDEC sought to avoid approval of a

standard that would require the use of patented technologies

and thereby expose its members to liability for unbounded

royalties. Rambus had participated as a member in JEDEC

deliberations, without disclosing that it actually had or

expected to have patents on some of the technologies that

were under consideration.

In fact, the FTC claimed Rambus had gone further and

engaged in affirmatively deceptive conduct. Rambus disclosed

its true patent position and demanded royalties only after its

technology had been incorporated in JEDEC standards and the

members had made substantial investments to accommodate

them.for exclusive The FTC’s complaint charged Rambus with

unlawful monopolization, based on this course of conduct.

The theory of the Rambus case was not unprecedented,

but it was the first of its kind that was actually litigated in

the agency. The FTC lost the first litigation round, when an

Administrative Law Judge (ALJ) dismissed the complaint. The

most significant element in the ALJ’s lengthy opinion was his

conclusion that the JEDEC disclosure rules were too indefinite,

and internally inconsistent, to support a deception claim. The

ALJ also found that it was impractical to require members to

disclose all their pending patent applications, and that many

other members in fact had not done so. The Commission

unanimously reversed the ALJ. The opinion recognized that

the JEDEC disclosure rules were less than clear, but found

that Rambus’ conduct was nevertheless deceptive.

The effect of Rambus on antitrust standards for standard-setting organizations

* The author participated in initial deliberations on the Rambus matter, while a member of the Federal Trade Commission, but the comments here are all based on public sources. Participants in the organization may unwittingly become vulnerable to substantial and unavoidable royalty claims if they approve a standard and make substantial investments to accommodate it before they became aware that the standard is based on patented technology.

Background



The Commission overtly applied the definition of deception

that is applied in its numerous consumer deception cases – a

definition that depends on whether a reasonable consumer

would be materially misled, notwithstanding the fact that

the seller’s literal representations might be ambiguous, or

even accurate, if read very carefully. It is the consumers’

perceptions that matter. This was the first time in recent years

that the Commission’s consumer protection standards have

been applied in a competition case, but it makes sense if the

predatory conduct involves deception. The standard-setting

body may select from competing technologies just as ordinary

consumers select from competing sellers in the marketplace.

Therefore, notwithstanding the vagueness of JEDEC’s

published rules on disclosure, and notwithstanding the fact

that some other members had also apparently violated one

reading of these written obligations, the FTC relied on the

members’ generally accepted obligation to proceed in good

faith. It reasoned that JEDEC’s disclosure obligations “should

be judged not only by the letter of its rules but also on how

the rules are interpreted by its members as evidenced by their

behavior as well as their statement of what they understood

the rules to be.”

The FTC found that there was abundant contemporaneous

evidence to show that all JEDEC members – including Rambus

– realized it was not proper to claim royalties for the first time

after a standard had been adopted. The disclosure of specific

patents or patent applications was not all that important if the

inventor did not intend to claim royalties from the members.

Because it had violated this common understanding, the FTC

found that Rambus had “unlawfully monopolized” a number of

markets. After the FTC had issued its final decision, Rambus

appealed to the D.C. Circuit Court, which promptly reversed

the decision.

Although the Circuit Court did take note of the fact that

JEDEC’s written directives were less than clear, its opinion

ultimately turned on a single sentence in the lengthy FTC

opinion, which did not appear to be particularly important at

the time. The FTC’s opinion had stated that if Rambus had

fully disclosed its intellectual property interests “JEDEC either

would have excluded Rambus’ patented technologies from

the JEDEC … standards, or would have demanded … an

opportunity for ex ante licensing negotiations ….” In the FTC’s

view, either alternative would support a conclusion that there

was competitive harm sufficient to support a monopolization

claim. In the Circuit Court’s view, however, the first alternative

would have supported a monopolization claim, but the second

would not. And, since the FTC did not say which outcome

was more probable, its ultimate conclusion failed as a matter

of law.

The Court reasoned that if the Rambus technology might have

been incorporated into a standard, in any event, then Rambus’

deception would have only affected the outcome of the ex

post licensing negotiations. Under the antitrust laws of the

United States, a monopolist that has not illegally acquired or

maintained its monopoly is free to charge any price that it

pleases. (The United States, unlike the European Union, does

not condemn the “abuse” of monopoly power, only the tactics

used to obtain or preserve it.) Since the FTC did not expressly

conclude that Rambus’ monopoly power itself was obtained

by deception, then Rambus is a lawful monopolist and its “use

of deception simply to obtain higher prices” was also lawful.

This austere logic is reminiscent of something that might

have been written by a bewigged English jurist centuries ago.

Of course, the FTC could not have been certain about the

response of other JEDEC members in an alternative universe

where Rambus had forewarned them of potential royalty

claims. However, there was ample evidence from which the

FTC could conclude that JEDEC members would never have

based a standard on known patented technology if they had

no idea of the potential costs to the members, and that is the

most reasonable way to interpret the “either/or” language of

the FTC’s opinion. Rambus’ deception therefore contributed

directly to its acquisition of monopoly power, as well as its

exploitation of the power.



The FTC has shown a keen interest in standard-setting issues,

as evidenced not only by its investigations and cases but also

by published speeches of individual Commissioners. If the

agency loses its motion for rehearing in the Circuit Court, it

may well seek Supreme Court review. The private sector may

have to accommodate uncertainty for some time. We turn

now to the lessons that Rambus will hold for standard-setting

organizations generally, regardless of the ultimate outcome of

the litigation.

The Impact of Rambus

As indicated above, the ultimate harm in the Rambus scenario

was not caused by the failure to disclose, by itself, but rather

by the subsequent “hold-up” of companies that had made

significant investments to accommodate a standard that they

did not realize was based on patented technology. And, as

the ALJ found and the Commission acknowledged, it may be

difficult to craft specific rules on what must be disclosed and

when.

The FTC has not suggested that antitrust laws compel

standard-setting organizations to adopt any particular rules

on member disclosure of intellectual property interests.

But, whatever the disclosure rules may be, it is obvious

that they should be consistent and clearly articulated. Even

though the FTC may yet prevail in Rambus and establish the

proposition that a member’s obligations can extend beyond

the four corners of written directives, it is obvious that prudent

organizations will need to be a lot more specific about what is

expected.

One way around the difficulty in specifying the content and

timing of disclosures would be simply to require all members

to agree in writing that they will not seek to collect royalties

based on any intellectual property interests that were not

disclosed before the pertinent standard had been approved.

The innovator could decide to disclose or not disclose, but a

commitment like this – which was not present in the Rambus

case – is likely to stimulate broader disclosures from the party

most knowledgeable about the facts. And, in the event of

an unanticipated claim for royalties after the standard had

been established, a written commitment would also provide

the organization with a simpler and stronger defense than

equitable estoppel based on deception.

The next question is what happens if the innovator does

disclose in advance an intellectual property interest, for

which it intends to claim royalties. Some standard-setting

organizations have taken the position that they will not

even consider the merits of a particular technology, in this

situation. Other organizations would rather keep their options

open. But, most would like to have some idea in advance

about the ultimate costs of technology before they include

it in a standard and cede substantial bargaining power to the

innovator. What binding assurances can be obtained up front?

A number of organizations have obtained commitments by

the innovator to license on so-called “RAND” (“reasonable

and non-discriminatory”) terms. The trouble with this kind of

promise is that reasonable minds can often differ on what is

“reasonable”, so the organization still does not have a firm

idea about the ultimate costs of the technology in a standard

under consideration. In fact, there has been litigation on the

issue of whether the innovator has ex post lived up to the

RAND commitments it made ex ante. The organization may

want to nail down the potential license terms more firmly

before it commits itself to a standard.

However, collective negotiation of terms looks like price-fixing,

which is probably per se illegal in every country in the world

that has an antitrust law. The heads of the two U.S. antitrust

agencies have recently suggested that it would not be per

se illegal for the innovator, at the very least, to announce its

intended royalty rate in advance. But, there still seems to be

some uncertainty about the agencies’ likely position on active

negotiations. And, that position – whatever it may be – may

influence, but not necessarily determine the outcome of

private litigation.


The reason for the distinction between announcement and

negotiation is not entirely clear. A bald announcement, with no

negotiations, does look more like a firm “unilateral” statement,

which antitrust precedent has not considered an invitation

to collude, in some contexts. But, the distinction seems

unrealistic. Suppose, for example, the innovator unilaterally

announces terms that are unacceptable to the organization.

If the innovator cannot then modify its proposal to stay in

contention, the outcome could be more confining for all parties

than a more flexible policy. But, would the flexibility to modify

a proposal after initial refusal be considered a questionable

“negotiation?” It is likely that the distinction between mere

announcements and negotiations will not survive, but there

may be some painful litigation before it disappears.

An additional practical issue, which has also given rise to

litigation, is the matter of successor liability. It is all very

well to obtain advance commitments, with a desired level

of specificity, from the innovator. But, the innovator’s entire

business, or perhaps just its patent portfolio, may be acquired

by an outside party that has not promised to do anything. An

antitrust claim based on deception may be questionable in

this situation, but a well-advised standard-setting organization

should be able to address the issue of successor liability, by

contract.

Conclusion

These practical issues and solutions will be present and

available, regardless of the ultimate outcome of the Rambus

case. Whether the FTC wins or loses, the litigation still will

have served a public purpose because it has highlighted a

number of issues that various interested parties need to

address. Different standard-setting organizations and their

members may choose to resolve these issues in different

ways, and that, too, is a form of healthy competition

By Thomas B. Leary, Hogan & Hartson LLP, Washington



mergermarket’s regional round-ups

North America: United States

Hexion files suit against Huntsman merger; epoxy divestitures also required for deal clearance

Huntsman and Hexion will have to divest epoxy businesses

in order to facilitate the closing of their merger. It is thought

that Hexion’s Iserlohn-Letmathe plant in Germany which has

an EBITDA of approximately US$30m and produces a family

of specialised expoxy products is the only such facility that will

be disposed in Europe.

Elsewhere, it is likely that a plant in the United States may also

need to be disposed as Hexion also produces multiple epoxy

resins there. General specialty companies such as Fuller, Dow,

Ashland, Hexcel, and Cytec are considered likely to show

an interest in any divestitures. However, an industry source

has expressed scepticism over whether the disposals can be

executed successfully before the 4 July termination date.

Meanwhile, Hexion announced in mid June that it has filed

suit in the Delaware Court of Chancery. It is claimed that

the capital structure agreed for the combined company

is no longer viable due to Huntsman’s increased net debt

and it’s lower than expected earnings. Hexion argues that

consummating the merger on the basis of the originally agreed

capital structure would render the combined entity insolvent.

Europe: Germany

Edeka and Tengelmann to dispose of Plus branches

Edeka and Tengelmann, the private German retail firms,

are reportedly willing to dispose up to 400 branches of

supermarket chain Plus. It is hoped that this will satisfy

German cartel authorities and push through a deal which

will see Tengelmann selling a majority stake in Plus to Edeka

via a joint venture model. The proposed transaction was

initially rejected by the German cartel office and it is unclear

whether these concessions will be sufficient to persuade the

authorities.

North America: Canada/United States

DOJ require Regal Cinemas and Consolidated Theatres to divest assets in North Carolina

The Department of Justice (DOJ) announced that it will require

Regal Cinemas and Consolidated Theatres to divest four

North Carolina movie theatre assets as part of their US$210m

merger. The DOJ claimed that as originally proposed the

transaction would substantially reduce competition in areas of

Charlotte, Raleigh and Asheville likely resulting in higher ticket

prices and decreased quality of viewing experience. Regal

Cinemas owns or operates 540 theatres in 39 states with

reported revenues of US$2.6bn.

Europe:/United States: United Kingdom/ United States

Sale of Enodis to be settled by “shootout” auction; ITW has “greater antitrust certainty”

The sale of Enodis, the UK listed catering equipment

manufacturer, is to be reportedly settled by a “shootout”

auction. The Takeover Panel is set to announce this week its

ruling on the matter with the auction to start within a matter

of weeks. It is claimed that last years auction of Corus which

involved nine rounds of bids at a minimum of 5p per share

increments will be used as an example.

Manitowoc and Illinois Tool Works (ITW), the US based

industrial groups, are the two bidders with Enodis previously

recommending Manitowoc’s offer of 294p per share. This

came after ITW had trumped Manitowoc’s original offer of

282p per share. With regard to antitrust issues surrounding

the situation, an industry insider has claimed that ITW has

a cleaner deal with greater antitrust certainty. Moreover,

a Manitowoc/Enodis merger has already lapsed based on

competition issues whereas the insider suggests that ITW

would only have to overcome minor overlaps.



Europe: Austria/Hungary

EC resumes phase II investigation into OMV/MOL tie up

The European Commission (EC) resumed the phase II

investigation into the acquisition of MOL, the Hungarian oil

and gas company, by its Austrian counterpart OMV. OMV

had asked the EC to investigate whether the proposed

transaction would violate competition regulations. The inquiry

was initially suspended on 5 May due to insufficient data from

OMV regarding possible overlap in the filling station network,

however, since then OMV has sent missing data to the EC. A

combined MOL/OMV entity would have a marker capitalisation

of £21.2bn.

Europe: Austria

EC likely to probe Austrian insurance transaction

The EC is likely to launch an in-depth examination of

the €1.4bn acquisition of Sparkassen Versicherung, the

Austria based insurance services company, by its domestic

counterpart Wiener Staedtische. According to a source within

the EC, the deal cannot be approved via a simple evaluation

process which is why the EC is likely to announce the start of

a detailed investigation by early June. Wiener Staedtische has

reportedly already mapped out its plans for potential disposals.

Europe/Asia: United Kingdom/Australia

BHP delays antitrust filings

BHP Billiton, the listed Australian diversified natural resources

company, has delayed antitrust filings to global competitors

regarding its €144.1bn acquisition of Rio Tinto, the UK mining

group. It is thought that BHP had originally planned to submit

the applications to European Union (EU) regulators in April but

will now make the submission in June.

Elsewhere, the Australian Competition and Consumer

Commission has said that it is likely to only receive initial

documents in June. An insider has said that it is vital to get

approval from EU regulators as an overly negative decision by

the EC could be a potential deal breaker.

Europe: Italy

Antitrust conditionally approves BMPS/Antonveneta deal

Antitrust, Italy’s competition regulator, has approved with

conditions the €9bn acquisition of Banca Antonveneta, by

Banca Monte dei Paschi di Siena (BMPS). Antitrust released a

statement saying that BMPS will have to dispose of between

110 and 125 branches in Tuscany, Biella, Mantova, Vercelli and

Perugia.

BMPS will also have to sell the stake it owns in Finsoe, the

company that controls Italian insurer Unipol, and abandon

its Vita life assurance joint venture with Unipol. Additionally,

BMPS will not be able to renew the bancassurance agreement

between Antonveneta and Allianz, the German insurer, when it

expires on 31 July 2009.


Europe: France/Germany/Italy/Spain

Enel’s and Acciona’s buy of Endesa notified to EC; decision expected by mid June

The €40.7bn acquisition of Endesa, the Spain based energy

company, by Enel and Acciona has been notified to the

EC and a phase I decision will be taken by 17 June. The

transaction had already been authorised by the EC on June

5 2007 although a new notification had to be filed when the

companies changed which assets were to be sold.

The EC will now examine the updated remedies proposed by

Enel and Acciona, which include selling certain businesses and

assets in Spain, Italy, France, Poland and Turkey to E.On, the

German power and gas company.

Europe: France/Sweden

Pernod-Ricard willing to make disposals on V&S buy

Pernod Ricard, the French producer of wine and spirits,

has said that it is prepared to make divestments in order to

receive a phase I clearance from the EC regarding its €5.6bn

acquisition of Swedish company Vin&Spirit. Gronstedts, the

Swedish cognac brand, is a disposal candidate as well as

Fris Vodka and Plymouth Gin whereas no Pernod brands will

be sold. Should Plymouth Gin be divested Campari could be

interested in buying the company.

In the meantime, a Pernod spokesman has said the sale of

its 10% stake in Beam Spirits&Wine will not have an effect

on the outcome of the EC’s investigation. However, the 10%

stake in Beam needs to be sold to Fortune Brands, the US

wine company, who own the remaining shares in Beam,

before Pernod can complete its acquisition of V&S. A Swedish

court reportedly rejected the request of Fortune to stop the

Swedish government from moving V&S’s original stake in

Beam to a separate company.

Europe: Germany

German cartel authority examine TUeV Sued/TUeV Rheinland deal

TUeV Sued and TUeV Rheinland, the Germany based industrial

companies, are in talks with the German cartel office regarding

possible concessions to allow their proposed merger to go

ahead. The two companies have asked the regulator for an

extension of the decision deadline to 18 July.

North America: United States

FTC issues complaint over anticompetitive acquisitions made by TALX

The FTC has issued a complaint challenging a series of

acquisitions by TALX Corporation that substantially lessened

competition in the markets for outsourced unemployment

compensation management (UCM) and verification of income

and employment (VOIE). The FTC claims that entry into the

relevant markets would not be sufficient to counteract the

anticompetitive effects of TALX’s acquisitions.

Moreover, it is also alleged that entry and expansion in the

outsourced UCM market for large, multi-state employers is

made more difficult by the large number of customers tied to

long-term contracts. Entry and expansion is also made more

difficult by non-compete and non-solicitation agreements

between TALX and its employees which reduce the number

of experienced persons available for hiring by potential

competitors. The FTC aims to create market entry and allow

long-term TALX customers to terminate their contracts and

eliminate non-complete clauses for both former and current

TALX employees.



Corporate Express & antitrust in Europe

In mid May, Staples increased its offer to €8 per share, which

was again turned down by Corporate Express, and the latest

offer is €9.15 per share, valuing the company at approximately

€2bn.

Around a week after the €8 offer being announced, Corporate

Express reacted with a move that came as a surprise for many:

The company said it has agreed to acquire Lyreco, a French

privately held office supplier, for €1.73bn. This step was widely

seen by observers as a move to shake off the unwanted

predator Staples.

But Staples was not taken completely by surprise. In fact

the US company had considered several weeks earlier that

Corporate Express might try to play the Lyreco trump card

and had carried out an internal antitrust analysis on a possible

Corporate Express-Lyreco tie up. Therefore Staples was

able to react early by creating noise in the market. The same

day Corporate Express announced its proposal for Lyreco it

was leaked from Staples that it was their belief that such a

combination would raise serious antitrust concerns.

And indeed independent competition experts widely agree that

there are significant differences between a Staples/Corporate

Express and a Corporate Express/Lyreco combination from an

antitrust perspective.

The European Commission has handled several deals in the

office supply industry in the past 10 years, and has therefore

developed market definitions over the course of these past

investigations, which could well be applied again in the

Corporate Express scenario.

Three aspects need to be taken into account: the products, the

customers, and the distributors.

Following these past decisions, the broader market for office

products includes a wide range of products, such as office

supplies, office furniture and office equipment. This means that

everything from envelopes to computers, copyiers and even

desks and storage solutions are considered.

From the demand side, customers include private households

as the smallest entity and offices of all sizes on the other end

of the scale.

The distributors are divided by their means of distribution. Most

importantly there are retailers with physical outlets, internet

and mail order companies, and contract stationers who’s

business model is based on longer term contracts with the

purchasers.

If past definitions are applied to the companies’ shapes as of

today, Corporate Express would be a contract stationer with

a considerable part of its customer base being large offices.

According to experts the business relationship between

customers and suppliers in these markets can usually be

described as a “bidding contest”. The customers describe their

demands in detail, and the contenders submit their tenders.

Staples works on a different business model, which largely

relies on mail order and its retail stores – of which 266 are

based in European countries, namely Belgium, Germany, the

Netherlands, Portugal and the United Kingdom. Websites and

catalogues business models exist in 15 European countries.

The majority of Staples’ revenues are generated with its US

outlets, which contribute 55% to overall sales. Based on 2006

figures only 13% of revenues are generated outside the North

American market.

Several months ago, in mid February, US office supplier Staples approached its Dutch based counterpart Corporate Express with a €7.25 per share acquisition proposal. The proposal was immediately turned down by Corporate Express as significantly undervaluing the company, but Staples remained firm.


Therefore experts concluded that a combined Corporate

Express/Staples should not face serious antitrust problems

within the European Union. Not only that their distribution

models widely differ, a second argument is that Staples

European business is comparatively small. On top of this,

Staples has a stronger focus on smaller and home offices. In a

presentation by Corporate Express executives last September,

the Dutch company said Staples’ sales on the “delivery” side

were 26% from mail order, 33% from small or home offices

and 41% from middle/large businesses. This compares to

around 20% of Corporate Express’ sales coming from the mid-

market. Corporate Express’ biggest market is the US, but the

company has no retail outlets there.

This proposed deal has already been notified in Brussels and is

currently being investigated in a simplified procedure with an

outcome expected in mid June.

A very different picture arises with Lyreco coming into play.

The French privately owned company claims to be the market

leader in Europe in b to b distribution of office supplies. In

its recent shareholder circular on the proposed Lyreco deal,

Corporate Express describes a takeover as “the most logical

and compelling merger one could envision in our industry”.

Although Corporate Express says the merging companies

would have “complementary global positions, geographical fit

and operations”, experts have their doubts due to significant

overlaps in certain national markets. An expert said that figures

on market shares, even though five years old, indicated great

overlaps between Lyreco and Corporate Express. According to

these figures the combined entity would reach market shares

of up to 60% in the Netherlands, 55% in France and 90% in

Iceland.

Staples sources, although it should be noted that these have

an obvious interest to derail the Corporate Express/Lyreco deal,

spread the following figures: The Corporate Express/Lyreco

combination would reach a 50% market share in France, Italy

and Spain, in Poland almost 80%, in Sweden almost 70% and

in the UK 40%.

Corporate Express admits that a full antitrust analysis is still

under way. However, it is understood that an early stage

analysis done by Corporate Express concluded that the deal

with Lyreco would not result in market shares above 25%

in any of the national European markets. Further details are

currently not available from the Corporate Express side, apart

from a vague statement in the shareholder circular that “[o]

btaining clearance from the competition authorities may

require the divestment of certain parts of the Combination.

This may affect the composition and geographic reach of

the Combination.” A company insider summarised that

“the company does not anticipate any significant roadblocks

regarding anti-trust arising.”

How can these differing views be explained? Persons following

the situation suggest the only possibility to argue this way

would be to apply different market definitions from the ones

used previously by the European Commission.

On expert said it was good practice for the EC to be open to

suggestions for market definitions by the merging companies.

If Corporate Express provided good economic evidence,

for instance by showing who purchased what and how, the

company might be able to convince the Commission on a

changed approach to market definitions.

It should also be taken into account that market share is not

the only relevant variable to examine the market. Even where

market shares of some competitors are high, low barriers to

entry and dynamic development can still indicate a healthy

market. A convincing argument would be to prove that new

competitors emerged successfully within the past few years or

entered the market from outside.

Wider use of the internet to order office supplies could

possibly be used as an additional argument for broader market

definitions and lower barriers to entry, compared to the

situation a couple of years ago. Again, this argument would

work in favour of the merging parties.

But could these arguments be sufficient? Other experts

have serious doubts. One pointed out that in the Buhrmann

(now Corporate Express)/Samas case back in 2001, the

merging companies needed to sell assets based on the

market definitions for contract stationing. He speculated that

market definitions were probably a major point of negotiations

between the Commission and the merging parties at the time,

to minimise required disposals. Therefore it would be hard to

convince the EC to ease past definitions further.



He also noted that part of the EC’s definition was the

requirement of large customers for a one-stop-shop for all

office supplies. This could hardly be substituted by smaller

competitors who could not deliver the full range of products.

Some multinational companies might even require multinational

players to negotiate a single contract for several countries, he

said. And in a tender market such as in contract stationing, “the

question arises how the suppliers compete in a bidding contest

if the number of competitors is reduced further.”

In Corporate Express’ shareholder circular on the Lyreco deal,

the company points out that “improved pricing mechanisms”

would be expected from the proposed merger. Perhaps this

is simply an attempt to gain shareholder approval, however,

it may well backfire when the EC looks at the antitrust

implications. “I cannot see any other interpretation than this

meaning increased prices,” an observer said, “which could be

a concern for the antitrust authorities.”

By Ben Bschor, dealReporter



On 11 June 2008 Corporate Express and Staples announced they had reached agreement on a €9.25 per share offer by Staples for Corporate Express, valuing the target at €3.1bn. At the same time Corporate Express terminated its merger agreement with Lyreco. The proposed takeover of Corporate Express by Staples was cleared unconditionally by the European Commission on 18 June 2008.

Consequences may indeed be particularly severe: the 10%

ceiling of the maximum fine can be much higher, the amount

of the fine itself can be dramatically increased with a view to

ensure greater ‘deterrence’ at group level and, above all, the

concept of ‘recidivism’ will systematically increase risks of

much higher fines in future cases.

Potentially, several tens or hundred of millions Euros are at

stake, not only in the specific case where the attribution of

liability arose, but also in all future EU cartel cases involving

the group as a whole. Further, this liability can be passed on,

under certain circumstances, to successor companies in case

of sale or transmission of the company.1

From a mere efficiency perspective, such policy has obvious

merits for the EU Commission, EU’s main antitrust enforcer,

as it increases the deterrence of its decisions and passes

onto the legal service of large companies a significant burden

of detecting cartels. However, does the quest for efficiency

permit any freedom? In Competition law, and specifically when

it comes to cartels, can the liability attributed to large groups

of companies be extended indefinitely? These are some of the

recurring questions that this article will briefly discuss.

I. For Cartel Purposes, What Is A “Group” In EU Antitrust Rules?

European antitrust law is pragmatic and supple by nature and

concerns the activities of ‘undertakings’, an economic notion

that is much broader than that of ‘company’. The European

Court of Justice (ECJ) ruled on several occasions that the

concept of ‘undertaking’ encompasses any entity pursuing

an economic goal, irrespective of its legal status or financing

(see for instance ECJ, 28 June 2005, Dansk Rørindustri e.a./Commission).

Should parents always pay for their children’s infringements in cartel cases? Scope and threats of “Group Liability” in EU antitrust rules

In European antitrust law, it seems that parent companies are systematically held liable for their subsidiaries’ infringement of antitrust rules. In recent years indeed, the European Commission has developed a systematic policy to attributing liability for anticompetitive actions of subsidiaries onto their parent companies. As a result of this recent trend, countless groups have realized at a hard price that the actions of a subsidiary, however remote or small, can have a major detrimental impact on all companies in the group.

1 The equally interesting question of the transfer of liability following a sale or restructuring will not be discussed in this article. It is worth noting, however, the recent ECJ decision in response to a preliminary ruling asked by the Italian antitrust authority (ECJ, 11 Dec. 2007, case C-280/06).


Since antitrust penalties are ‘quasi-criminal’, they can only

be handed down to legal persons, a concept narrower than

‘undertakings’ (ECJ, 3 July 2007, Autorità Garante). As a

result, where the ‘undertaking’ subject to a penalty is not a

single legal entity, as is often the case, the Commission must

demonstrate that the various entities are all in fact parts of the

same ‘undertaking’, i.e. that they have a common behaviorr

on the market, despite their separate legal personas. In the

ICI case of 1972, the ECJ held that for a parent company

to be responsible for the illegal actions of its subsidiary,

it is necessary to establish that this subsidiary ‘does not

determine its actions in the marketplace independently, but

rather applies, for the most part, those instructions given to

it by the parent company’. And in the 1983 AEG case, the

Court established the presumption that if a subsidiary is 100%

owned by a parent company, it is presumed to apply policies

determined by the parent company.

There lies the crux of the matter: is it enough to show a 100%

capital ownership to attribute liability? This presumption is

crucial in the analysis and is referred to as the ‘capitalistic

presumption’ in this article. By nature, a parent company is

in a position to exert some form of influence on its subsidiary.

But this should not be enough to retain the parent’s liability.

As stated in the ICI case cited above, what matters is that the

subsidiary had no autonomous behavior on the marketplace,

and instead followed its parents’ instructions.

There are two conflicting schools of thought on the matter.

Not surprisingly, the European Commission assimilates as

much as possible the generic influence of a parent company

over its subsidiaries to that of a decisive influence on its

commercial practices, sometimes to the point of absurdity.

For instance, in a recent cartel decision on the Dutch bitumen

market (September 2006), the Commission held Total SA,

the mother company, liable for the behaviour of its Dutch

subsidiary engaged in the cartel. Total SA on the contrary,

argued that it fulfilled solely the role of a holding company with

regards to its Dutch subsidiary, in other words it handled only

a) the general human resource policy of the group;

b) consolidation of the turnover of the group and the fiscal

policy of the group;

c) supervision of issues such as institutional relations,

industrial security, environment and sustainable development,

insurance, financial and legal functions of the group; and

d) the management of the subsidiary’s principal investments.

However, the Commission ultimately decided that these

functions were “exactly the kind of indications that

demonstrate that the Total group operates as a single

undertaking, headed by Total SA, and that the latter exerts

decisive influence as regards the basic orientations of the

subsidiaries’ operations on the market.” With such a wide and

catch-all interpretation of the concept of determining influence,

virtually no integrated group can hope to escape the “group

liability”.

There is another approach, though, generally argued

by defendant parent companies who adhere to a strict

interpretation of the notion of ‘influence’ in an attempt to

increase the Commission’s burden of proof. This approach is

supported by some court precedents, although the case-law

is neither consistent, not totally unambiguous. The Court

of First Instance of the European Union, which controls the

Commission’s decisions in antitrust cases (subject to the ECJ’s

review), seems indeed to be more concerned with rigorously

analyzing the facts. In a recent Akzo case 2 (12 December

2007), it provided a list of areas in which a parent may exert

a determining influence on the commercial behavior stricto

sensu : pricing policy, production and distribution activities,

sales objectives, gross margins, sales costs, cash flow, stocks

and marketing. However, this list is not comprehensive, and

other factors can be taken into account, such as the economic

and legal organizational links between the parent and the

subsidiary.

Should parents always pay for their children’s infringements in cartel cases?

2 CFI, 12 Dec. 2007, Akzo v. Commission, case T-112/05, para. 64.



Can the capitalistic presumption be overturned? In theory, the

answer is in the affirmative: consistent case law has shown

that the presumption is rebuttable, as was affirmed recently

by the Court in the Akzo case mentioned above. But in

practice, the presumption appears very hard to overturn given

that the burden of proof lies with the defendant and it often

amounts to proving negative facts. How can a subsidiary

conclusively establish that its mother company has no ability

to influence its commercial policy? This has a lot of practical

consequences on the management of integrated companies:

at the risk of losing benefits of integration (economies of

scale, in particular), a large company may consider granting its

subsidiaries a very broad autonomy and organizing very loose

reporting lines. But this policy should only be contemplated

in very specific circumstances and be designed with a lot of

caution, owing to the extremely far-reaching approach favored

by the Commission. And even with the widest autonomy, it

is likely that the Commission will keep on trying to attribute

liability to the whole group, owing to the practical upsides

it gives the Commission (access to a deep pocket, greater

deterrence, etc.).

Another crucial question is whether it is necessary to

corroborate the capitalistic presumption with other, unrelated,

factual evidence? On this matter, there seems to be a true

divergence of opinion within the other European high court,

i.e. the Court of First Instance (CFI). The various chambers

of the CFI have recently ruled in diverging directions. For

instance, the 5th Chamber decided in the Daimler Chrysler (15

September 2005) and Bolloré (26 April 2007) cases that the

capitalistic presumption was never sufficient in itself, and that

the Commission had to bring additional evidence to retain the

parent’s liability.

The 2nd Chamber, on the other hand, adopts a more lenient

approach with regards to the burden of proof weighing on

the Commission. In the Tokai Carbon case (15 June 2005),

it stated that the Commission may, in substance, assume

that a fully-owned subsidiary essentially applies its mother

company’s instructions. As for the opinion of the ECJ, its

solution in the case Stora (16 November 2000) is not without

ambiguity and did not succeed in dispelling any uncertainty in

the matter.

Given this uncertainty, the Commission invokes the capitalistic

presumption as often as possible, but also backs it up with

other facts as often the case allows, such as for instance:

a) an active role played by the parent company in the antitrust

proceedings;

b) the presence of same directors on the boards of both

the parent company and the subsidiary, the presence of an

in-house lawyer of the parent company’s on the subsidiary’s

premises during the investigations;

c) independent and direct participation by the parent company

in the agreement;

d) participation of several subsidiaries of the same parent

company in the cartel, etc.

On the basis of the above analysis, one can see that the

capitalistic presumption poses many threats as it is broadly

defined, difficult to rebut, and sometimes considered sufficient

in and by itself to trigger the “group liability”. It is now time to

see what are the consequences of this policy.

II. The Harsh Consequences Of The Group Liability Policy

In 2007, the Commission handed down a record number of

sanctions against cartels. In 8 decisions, the Commission

sanctioned a total of 44 companies with fines totaling

3.3 billion Euros. In most cases, parent companies and

their subsidiaries were held jointly and severally liable, by

application of the systematic policy described above. But

beyond the solidarity in the actual payment of the fine, which

allows the Commission to dig into the “deep pocket”, the

group liability policy does affect the actual amount fined by the

Commission.



Firstly, because it automatically increases the ceiling of the

maximum amount of the fine, which is calculated on the basis

of the whole group’s turnover (current ceiling is set at 10%

of the turnover). Secondly, because the deterrence factor

increases with the size of the group. In its AMCA decision of

2005 , the Commission increased the fine imposed on Arkema

by 250% due to the size of the then parent company. Had the

parent company not been taken into account, the “deterrence

factor” would have reached ‘only’ 150%. The differences

accounted for several millions Euros in fine.

Above all, the long-term consequences stemming from the

concept of ‘recidivism’ are potentially the most devastating.

Because recidivism (repeat offence) is analyzed at group

level, once a subsidiary in the group has been found guilty,

all subsidiaries in the whole group are potential recidivist in

the future, with potential huge upsides (up to 100% per case)

on future fines. And the Court ruled in the Danone case (25

October 2005)3 that there is no prescription when it comes

to repeat offences, which means in theory that one decision

can have ever lasting consequences in the future, although in

practice, the Commission seem to consider that the lapse of a

10-year period “resets the clock”.

Lastly, one should not underestimate the harm caused by the

condemnation of a subsidiary to the group’s global image.

This type of consequence is difficult to measure, but it is very

important since a group’s reputation rests on its good name.

The Commission is well aware of this, as one can see by

reading the press releases accompanying decisions against

large company groups.

Conclusion

In practice, parent companies of groups have little room to

manœuvre, since the Commission is quick to jump on any

amount of control to support its wide interpretation of group

liability – with potentially devastating consequences.

By Michel Debroux, Hogan & Hartson MNP, Paris

3 COMP/E-1/37.773 – AMCA. An appeal is pending (case T-168/05).


Deal Terms Ann. Date Est. Comp Days to comp

Sett. Date Target Country

Target Mkt Cap (m)

Net Sprd Change Ann. Return

Ballingslov Int. / Stena AB

1 BALL = EUR6.6274

16 May 2008 02 Jul 2008 23 Sweden EUR-213m 0.02% -0.19% 0.34%

Corporate Expre. / Staples Incorpo.

1 CXP = EUR9.15

13 May 2008 27 Jun 2008 18 09 Jul 2008 Netherlands EUR-1,644m

1.33% -0.11% 23.10%

Cremonini s.p.a. / Luigi Cremonini

1 CRM = EUR3.00

31 Mar 2008 13 Jun 2008 4 19 Jun 2008 Italy EUR-425m 2.75% 0.02% 143.51%

D+S europe AG (. / Apax Partners

1 DSJ = EUR13.00

15 Apr 2008 31 Jul 2008 52 Germany EUR-487m 0.08% -0.08% 0.51%

Ducati Motor Ho. / Investindustria.

1 DMH = EUR1.70

19 Feb 2008 06 Jun 2008 Completed 13 Jun 2008 Italy EUR-545m 2.47% 0.12% N/A

Enodis Plc / Manitowoc Compa.

1 ENO = GBP2.94

14 Apr 2008 31 Aug 2008 83 United Kingdom

GBP-1,131m

-3.82% -0.16% -16.20%

Enodis Plc / Illinois Tool W.

1 ENO = GBP2.80

08 May 2008 31 Aug 2008 83 United Kingdom

GBP-1,131m

-8.37% -0.15% -35.51%

Ersol Solar Ene. / Robert Bosch Gm.

1 ES6 = EUR101.00

02 Jun 2008 11 Aug 2008 63 Germany EUR-1,082m

0.13% -0.01% 0.71%

Expro Internati. / Umbrellastream .

1 EXR = GBP15.50

17 Apr 2008 26 Jun 2008 17 United Kingdom

GBP-1,817m

-4.62% -0.35% -84.23%

FKI plc / Melrose Plc

1 FKI = 0.277 MRO + GBP0.40

22 Apr 2008 01 Jul 2008 22 15 Jul 2008 United Kingdom

GBP-513m 1.03% -0.45% 15.06%

GCap Media Plc / Global Radio UK.

1 GCAP = GBP2.25

31 Mar 2008 06 Jun 2008 Completed 20 Jun 2008 United Kingdom

GBP-373m 0.33% 0.00% N/A

Geodis SA (form. / SNCF Participat.

1 GEO = EUR135.00

28 Apr 2008 01 Jul 2008 22 21 Jul 2008 France EUR-1,038m

2.80% 0.01% 40.83%

GfK AG / Taylor Nelson S.

1 GFK = 11.74 TNS

03 Jun 2008 31 Dec 2008 205 Germany EUR-1,040m

30.55% -2.00% 53.61%

Hypo Real Estat. / J.C Flowers & C.

1 HRX = EUR22.50

16 Apr 2008 23 Jun 2008 14 09 Jul 2008 Germany EUR-4,193m

7.91% -0.68% 169.91%

Interhyp AG / ING Direct

1 IYP = EUR64.00

19 May 2008 31 Jul 2008 52 Germany EUR-409m 1.68% -0.23% 11.18%

Marazzi Group S. / Fintiles S.r.l.

1 MRZ = EUR7.15

13 May 2008 09 Jul 2008 30 Italy EUR-722m 1.20% -0.01% 13.31%

Live deals – Europe


Live deals – Europe



Target Mkt Cap (m)


Neuf Cegetel SA / SFR SA (Formerl.

1 NEUF = EUR35.90

23 Apr 2008 30 Jun 2008 21 France EUR-7,555m

-0.28% -0.25% -4.22%

Ocean Rig ASA / DryShips Inc.

1 OCR = EUR5.6602

22 Apr 2008 11 Jun 2008 2 25 Jun 2008 Norway EUR-963m 0.13% -0.21% 9.69%

Rio Tinto plc / BHP Billiton pl.

1 RIO = 2.72 BHP + GBP14.51

06 Feb 2008 31 Dec 2008 205 United Kingdom

GBP-60,790m

10.17% 0.39% 17.84%

Scorpion Offsho. / SeaDrill Limite.

1 SCORE = EUR9.98

29 Apr 2008 23 Jun 2008 14 07 Jul 2008 Bermuda EUR-562m -3.70% -0.20% -79.41%

Strabag AG / Strabag SE (for.

1 STB = EUR260.00

07 May 2008 15 Jul 2008 36 Germany EUR-1,066m

-1.70% -0.75% -15.92%

Suez SA (former. / Gaz de France S.

1 SZE = 0.9545 GAZ + EUR5.4996

27 Feb 2006 31 Aug 2008 83 France EUR-60,971m

-0.81% 0.36% -3.42%

Tele Atlas NV / TomTom N.V.

1 TA = EUR30.00

23 Jul 2007 30 May 2008 Completed 08 Jul 2008 Netherlands EUR-2,677m

0.40% -0.20% N/A

Wavefield Insei. / TGS-NOPEC Geoph.

1 WAVE = 0.505 TGS

30 Jul 2007 31 Dec 2008 205 Norway EUR-671m -0.58% -0.21% -1.01%


Live deals – Asia


Sett. Date

Target Country

Target Mkt Cap (m)


Abra Mining Lim. / Hunan Nonferrou.

1 AII = AUD0.806

13 May 2008

04 Jul 2008 25 26 Jul 2008

Australia AUD-93m 22.12% 1.82% 278.42%

ARC Energy Limi. / Australian Worl.

1 ARQ = 0.30 AWE + AUD0.495

24 Apr 2008

15 Aug 2008 67 Australia AUD-467m 16.53% 0.12% 86.20%

Aucnet Inc. / IDSP

1 9669 = JPY2100.00

27 May 2008

09 Jul 2008 30 01 Aug 2008

Japan JPY-22,465m 0.48% -0.24% 5.29%

Ausdrill Limite. / Macmahon Holdin.

1 ASL = 1.45 MAH

21 May 2008

22 Jul 2008 43 11 Aug 2008

Australia AUD-449m -3.05% -1.23% -24.23%

Bank Internasio. / Malayan Banking.

1 BNII = USD0.0558

26 Mar 2008

01 Sep 2008 84 Indonesia USD-2,422m 11.82% 1.33% 49.60%

Bemax Resources. / Cristal Austral.

1 BMX = AUD0.32

26 May 2008

04 Jul 2008 25 Australia AUD-292m 3.23% 1.64% 42.05%

Bosch Corporati. / Robert Bosch Gm.

1 6041 = JPY600.00

23 Apr 2008

19 Jun 2008 10 26 Jun 2008

Japan JPY-269,077m

0.17% 0.00% 4.35%

Boustead Proper. / Boustead Holdin.

1 2771 = USD1.6841

15 May 2008

17 Jul 2008 38 02 Sep 2008

Malaysia USD-423m 1.60% 0.06% 14.29%

Bravura Solutio. / Ironbridge Capi.

1 BVA = AUD1.73

05 May 2008

15 Aug 2008 67 Australia AUD-182m 33.59% 0.00% 172.68%

CBH Resources L. / Perilya Limited

1 CBH = 0.3333 PEM + AUD0.0338

26 Mar 2008

15 Jul 2008 36 Australia AUD-215m 0.82% -1.29% 7.71%

Centurion Bank . / HDFC Bank Ltd

1 CENTBOP = 0.0345 HDFCBANK

29 Feb 2008

23 May 2008 Completed 18 Jun 2008

India INR-77,728m 3.76% 1.84% N/A

China Netcom Gr. / China Unicom Lt.

1 906 = 1.508 762

02 Jun 2008

31 Oct 2008 144 Hong Kong

HKD-157,766m

-2.16% -0.48% -5.35%

Chongqing Titan. / Panzhihua New S.

1 000515 = 1.78 000629

05 Nov 2007

30 Jul 2008 51 China CNY-2,864m 13.90% 0.24% 93.93%

Core Healthcare. / Hong Kong Healt.

1 8250 = 1.4286 397

06 Jun 2008

01 Aug 2008 53 Hong Kong

HKD-1,203m -2.70% -1.77% -17.59%

Cosmo Securitie. / CSK Holdings Co.

1 8611 = 0.046 9737

23 May 2008

01 Aug 2008 53 Japan JPY-44,478m -0.33% 1.92% -2.17%

Dabur Pharma Lt. / Fresenius SE

1 DABURPHARM = INR75.634

28 Apr 2008

03 Jul 2008 24 18 Jul 2008

India INR-11,453m 3.47% 0.00% 46.86%

Dyno Nobel Limi. / Incitec Pivot L.

1 DXL = 0.0141 IPL + AUD0.70

11 Mar 2008

02 Jun 2008 Completed 17 Jun 2008

Australia AUD-2,567m 8.07% 7.96% N/A

Eneserve Corpor. / Daiwa House Ind.

1 6519 = JPY609.00

30 May 2008

22 Jul 2008 43 29 Jul 2008

Japan JPY-25,089m 0.50% 0.17% 3.93%

Equigold NL / Lihir Gold Limi.

1 EQI = 1.32 LGL

20 Mar 2008


Australia AUD-853m -0.84% -1.09% N/A

E-TEN Informati. / Acer Incorporat.

1 2432 = 0.9345 2353

03 Mar 2008

05 Aug 2008 57 Taiwan USD-326m 12.77% -1.12% 77.69%


Live deals – Asia


Sett. Date

Target Country

Target Mkt Cap (m)


Herald Resource. / Bumi Resources .

1 HER = AUD2.55

12 Dec 2007

20 Jun 2008 11 11 Jul 2008

Australia AUD-554m -8.93% 0.00% -232.78%

Herald Resource. / Consortium for .

1 HER = AUD2.65

30 Jan 2008

19 Jun 2008 10 10 Jul 2008

Australia AUD-554m -5.36% -0.34% -139.67%

Hindustan Oil E. / ENI s.p.a.

1 500816 = INR133.247

24 Apr 2008

30 Jun 2008 21 India INR-17,139m 4.22% 4.30% 61.63%

Indophil Resour. / Xstrata Plc (fo.

1 IRN = AUD1.00

15 May 2008

15 Jul 2008 36 Australia AUD-452m -8.26% 0.83% -77.28%

Just Group Limi. / Premier Investm.

1 JST = 0.25 PMV + AUD2.095

31 Mar 2008

20 Jun 2008 11 Australia AUD-747m 9.59% 0.27% 233.47%

Kibun Food Chem. / Kikkoman Co., L.

1 4065 = 0.851 2801

19 Mar 2008

01 Aug 2008 53 19 Sep 2008

Japan JPY-30,912m 1.68% 2.34% 10.98%

Lion Selection . / Indophil Resour.

1 LST = 2.70 IRN

19 Mar 2008

07 Jul 2008 28 Australia AUD-347m 62.15% 1.61% 731.75%

Magnum Corporat. / Multi-Purpose H.

1 3735 = USD1.0714

20 Nov 2007

30 Jun 2008 21 Malaysia USD-1,521m 2.07% 0.07% 31.44%

Midwest Corpora. / Sinosteel Corpo.

1 MIS = AUD6.38

14 Mar 2008

13 Jun 2008 4 04 Jul 2008

Australia AUD-1,381m -5.90% -1.12% -239.27%

Mineral Securit. / CopperCo Ltd. (.

1 MXX = 2.20 CUO

29 Jan 2008

31 Jul 2008 52 Australia AUD-197m 4.26% -5.74% 27.77%

Mitsubishi UFJ . / Mitsubishi UFJ .

1 8583 = 0.37 8306

28 May 2008

01 Aug 2008 53 19 Sep 2008

Japan JPY-434,743m

-0.40% -0.48% -2.64%

Pan Gang Group . / Panzhihua New S.

1 000569 = 0.82 000629

05 Nov 2007

30 Jul 2008 51 China CNY-5,242m 15.51% 1.13% 104.82%

Programmed Main. / Spotless Group .

1 PRG = 0.825 SPT + AUD3.00

27 Mar 2008

13 Jun 2008 4 04 Jul 2008

Australia AUD-374m 35.51% 15.49% 1851.38%

Ranhill Utiliti. / Consortium for .

1 5050 = USD1.074

06 Jun 2008

18 Jul 2008 39 Malaysia USD-282m 14.76% -0.73% 92.86%

Ricoh Elemex C. / Ricoh Company, .

1 7765 = 0.50 7752

15 May 2008

01 Aug 2008 53 30 Sep 2008

Japan JPY-23,779m 0.73% 0.41% 4.75%

Ridley Corporat. / GrainCorp Ltd.

1 RIC = 0.1111 GNC

16 May 2008

05 Aug 2008 57 Australia AUD-423m -11.51% -0.87% -70.03%

Rio Tinto Limit. / BHP Billiton Lt.

1 RIO = 3.40 BHP

06 Feb 2008

31 Dec 2008 205 Australia AUD-63,178m 7.97% 1.25% 13.99%

SBI E*Trade Sec. / SBI Holdings In.

1 8701 = 3.55 8473

15 Jan 2008

01 Aug 2008 53 30 Sep 2008

Japan JPY-355,200m

0.90% -0.37% 5.89%

Shanghai Power . / Shanghai Electr.

1 600627 = 7.32 2727

30 Aug 2007

15 Jun 2008 6 China CNY-21,755m -32.07% 0.50% -1300.49%


Live deals – Asia


Sett. Date

Target Country

Target Mkt Cap (m)


St George Bank . / Westpac Banking.

1 SGB = 1.31 WBC

13 May 2008

29 Nov 2008 173 Australia AUD-17,012m -3.76% 0.92% -7.79%

Sumco Techxiv C. / Sumco Corporati.

1 5977 = 1.20 3436

06 Mar 2008

30 May 2008 Completed 18 Jul 2008

Japan JPY-94,224m 1.54% -0.58% N/A

Thomas Cook (In. / Thomas Cook Gro.

1 THOMASCOOK = INR100.886

10 Mar 2008

13 Jun 2008 4 India INR-15,138m 7.15% 0.68% 373.06%

Tokyu Store Cha. / Tokyu Corporati.

1 8197 = 1.00 9005

27 Mar 2008

01 Jul 2008 22 30 Aug 2008

Japan JPY-40,484m 0.52% -0.01% 7.59%

Toys R Us Japan / Toys 'R Us

1 7645 = JPY729.00

13 May 2008

10 Jun 2008 1 17 Jun 2008

Japan JPY-24,871m 0.55% -0.14% 40.27%

Unisteel Techno. / Kohlberg Kravis.

1 U24 = USD1.4286

07 Jun 2008

29 Aug 2008 81 Singapore USD-519m 10.74% 4.13% 46.69%

U-Store Co Ltd / Uny Co., Ltd.

1 9859 = 0.83 8270

10 Apr 2008

21 Aug 2008 73 17 Oct 2008

Japan JPY-36,928m -31.43% -0.48% -150.95%

UTV Software Co. / The Walt Disney.

1 UTVSOF = INR812.638

18 Feb 2008

31 Jul 2008 52 15 Aug 2008

India INR-17,816m 4.43% -0.42% 29.41%

Victor Company . / Kenwood Corpora.

1 6792 = 2.00 6765

12 May 2008

01 Oct 2008 114 30 Nov 2008

Japan JPY-89,395m 2.02% 0.00% 6.32%

Wing Lung Bank . / China Merchants.

1 96 = HKD156.50

02 Jun 2008

21 Jan 2009 226 Hong Kong

HKD-35,688m 2.02% -0.40% 3.21%

Zinifex Ltd / Oxiana Limited

1 ZFX = 3.1931 OXR

03 Mar 2008

20 Jun 2008 11 04 Jul 2008

Australia AUD-4,592m 1.58% -0.76% 41.28%




Target Mkt Cap (m)


Activision Inc / Vivendi SA

1 ATVI = USD27.50

02 Dec 2007

30 Jun 2008

21 USA USD-9,910m -19.17% 1.12% -291.47%

Ansoft Corporat. / Ansys Inc

1 ANST = 0.4319 ANSS + USD16.25

31 Mar 2008

30 Sep 2008

113 USA USD-836m 0.89% 0.29% 2.80%

Aquila Inc (for. / Great Plains En.

1 ILA = 0.0856 GXP + USD1.80

07 Feb 2007

15 Jul 2008 36 USA USD-1,404m 6.75% 1.73% 63.22%

Basic Energy Se. / Grey Wolf, Inc.

1 BAS = 3.678 GW

21 Apr 2008

18 Aug 2008

70 USA USD-1,228m 0.52% -0.05% 2.60%

BCE Inc / BCE Consortium

1 BCE = USD41.9378

30 Jun 2007

30 Jun 2008

21 Canada USD-27,468m

23.31% 0.18% 354.51%

Bentley Pharmac. / Teva Pharmaceut.

1 BNT = USD16.02

31 Mar 2008

30 Sep 2008

113 USA USD-355m 1.26% 0.83% 3.98%

Bois d' Arc Ene. / Stone Energy Co.

1 BDE = 0.165 SGY + USD13.65

30 Apr 2008

29 Aug 2008

81 USA USD-1,617m 1.37% 0.14% 5.96%

CHC Helicopter . / First Reserve C.

1 FLY.A = USD32.0591

22 Feb 2008

30 Jun 2008

21 Canada USD-1,448m 1.45% 0.26% 22.09%

ChoicePoint, In. / Reed Elsevier p.

1 CPS = USD50.00

21 Feb 2008

21 Aug 2008

73 USA USD-3,487m 2.56% 0.19% 12.31%

Clear Channel C. / Clear Channel A.

1 CCU = USD36.00

16 Nov 2006

30 Sep 2008

113 USA USD-17,619m

2.83% 0.26% 8.90%

CNET Networks I. / CBS Corporation.

1 CNET = USD11.50

15 May 2008

15 Jul 2008 36 USA USD-1,741m 0.61% -0.18% 5.73%

Countrywide Fin. / Bank of America.

1 CFC = 0.1822 BAC

11 Jan 2008

30 Sep 2008

113 USA USD-2,911m 10.48% 2.47% 32.97%

CSK Auto Corpor. / O'Reilly Automo.

1 CAO = 0.4285 ORLY + USD1.00

01 Apr 2008

30 Jul 2008 51 USA USD-500m 4.02% -3.26% 27.20%

DRS Technologie. / Finmeccanica Sp.

1 DRS = USD81.00

12 May 2008

15 Dec 2008

189 USA USD-3,251m 2.79% -0.03% 5.31%

Electronic Data. / Hewlett-Packard.

1 EDS = USD25.00

13 May 2008

15 Sep 2008

98 USA USD-12,289m

2.08% 0.00% 7.53%

Energy East Cor. / Iberdrola SA

1 EAS = USD28.50

25 Jun 2007

25 Jun 2008

16 USA USD-4,247m 6.22% 0.47% 119.57%

Esmark Inc / Essar Steel Hol.

1 ESMK = USD17.00

30 Apr 2008

31 Aug 2008

83 USA USD-730m -7.96% -2.98% -33.78%

Esmark Inc / Severstal OAO

1 ESMK = USD17.00

30 May 2008

31 Aug 2008

83 USA USD-730m -7.96% -2.98% -33.78%

First Charter C. / Fifth Third Ban.

1 FCTR = 1.2963 FITB + USD9.30

16 Aug 2007

06 Jun 2008

Completed 11 Jun 2008

USA USD-1,041m 3.26% -1.11% N/A

FTD Group Inc. / United Online, .

1 FTD = 0.4087 UNTD + USD10.65

30 Apr 2008

29 Aug 2008

81 USA USD-432m 6.41% 0.09% 27.87%

Live deals – America




Target Mkt Cap (m)


Getty Images In. / Hellman & Fried.

1 GYI = USD34.00

25 Feb 2008

30 Jun 2008

21 USA USD-1,988m 1.83% 0.33% 27.78%

HLTH Corporatio. / WebMD Corporati.

1 HLTH = 0.1979 WBMD + USD6.89

21 Feb 2008

31 Oct 2008

144 USA USD-2,283m 8.20% -0.89% 20.36%

Huntsman Corpor. / Hexion Specialt.

1 HUN = USD28.00

12 Jul 2007 30 Jun 2008

21 04 Jul 2008

USA USD-4,678m 32.83% 3.32% 499.25%

NAVTEQ Corporat. / Nokia Oyj

1 NVT = USD78.00

01 Oct 2007

15 Aug 2008

67 USA USD-7,606m 1.15% 0.16% 6.02%

Northwest Airli. / Delta Air Lines.

1 NWA = 1.25 DAL

14 Apr 2008

31 Mar 2009

295 USA USD-1,735m 7.29% 0.86% 8.93%

NYMEX Holdings,. / CME Group

1 NMX = 0.1323 CME + USD36.00

17 Mar 2008

31 Dec 2008

205 USA USD-7,846m 4.54% -0.06% 7.96%

Penn National G. / Penn National A.

1 PENN = USD67.00

15 Jun 2007

15 Jul 2008 36 USA USD-3,915m 46.42% 1.21% 434.41%

Puget Energy In. / Puget Acquisiti.

1 PSD = USD30.00

26 Oct 2007

25 Oct 2008

138 USA USD-3,586m 9.40% 0.36% 24.34%

Rural Cellular . / Verizon Wireles.

1 RCCC = USD45.00

30 Jul 2007 30 Jun 2008

21 USA USD-695m 0.67% 0.11% 10.21%

SAFECO Corporat. / Liberty Mutual .

1 SAF = USD68.25

23 Apr 2008

30 Sep 2008

113 USA USD-6,022m 1.50% 0.00% 4.73%

Saxon Energy Se. / Saxon Energy Co.

1 SES = USD6.867

05 May 2008

31 Jul 2008 52 Canada USD-578m 0.43% 0.34% 2.85%

Sirtris Pharmac. / GlaxoSmithKline.

1 SIRT = USD22.50

22 Apr 2008

05 Jun 2008


USA USD-658m 0.00% 0.00% N/A

Synenco Energy . / Total SA (form.

1 SYN = USD8.829

28 Apr 2008

15 Jul 2008 36 Canada USD-444m 0.33% 0.30% 3.13%

Take Two Intera. / Electronic Arts.

1 TTWO = USD25.74

13 Mar 2008

20 Jun 2008

11 USA USD-2,034m -5.92% 0.99% -154.37%

The Wm. Wrigley. / Mars Incorporat.

1 WWY = USD80.00

28 Apr 2008

28 Jan 2009

233 USA USD-21,134m

3.83% 0.24% 5.92%

Trane Inc. (for. / Ingersoll-Rand .

1 TT = 0.23 IR + USD36.50

17 Dec 2007

05 Jun 2008


USA USD-8,954m 0.10% 0.22% N/A

TriZetto Group . / Apax Partners

1 TZIX = USD22.00

11 Apr 2008

08 Oct 2008

121 USA USD-924m 1.99% 0.14% 5.87%

Wendy's Interna. / Triarc Companie.

1 WEN = 4.25 TRY

24 Apr 2008

30 Sep 2008

113 USA USD-2,344m 1.58% -0.01% 4.96%

W-H Energy Serv. / Smith Internati.

1 WHQ = 0.48 SII + USD56.10

03 Jun 2008

15 Sep 2008

98 USA USD-2,944m -0.09% 0.61% -0.32%

XM Satellite Ra. / Sirius Satellit.

1 XMSR = 4.60 SIRI

19 Feb 2007

27 Jun 2008

18 USA USD-2,983m 6.41% -0.57% 111.39%

Live deals – America


Live deals – Emerging Europe, Middle East and AfricaDeal Terms Ann. Date Est. Comp Days to

compSett. Date Target

CountryTarget Mkt

Cap (m)Net Sprd Change Ann.

Return

ABG SA / Asseco Poland S.

1 ABG = 0.099 ACP

29 May 2008

01 Oct 2008 114 Poland EUR-178m 1.02% 0.31% 3.18%

ATF Bank AO / Bank Austria Cr.

1 ATFB = USD85.8203

13 Nov 2007

20 Jun 2008 11 Kazakhstan USD-1,588m 11.34% -0.02% 295.78%

Bank VTB North-. / JSC VTB Bank

1 VTBS = USD1.9171

14 Apr 2008

23 Jun 2008 14 Russia USD-2,363m 2.32% -0.42% 49.73%

Diversified Pro. / Resilient Prope.

1 DIV = 0.4375 RES

02 Apr 2008

30 Jun 2008 21 07 Jul 2008

South Africa USD-177m 5.22% 1.25% 79.44%

Everest SA (Gr. / Vivartia S.A. (.

1 EVER = EUR3.50

12 Mar 2008

10 Jun 2008 1 16 Jun 2008

Greece EUR-93m 8.70% 3.91% 793.48%

Gilat Satellite. / Bidco for Gilat.

1 GILT = USD11.40

31 Mar 2008

01 Sep 2008

84 Israel USD-428m 4.68% 0.10% 19.65%

iFour Propertie. / Pangbourne Prop.

1 IFR = 0.7941 PAP

25 Feb 2008


South Africa USD-196m -3.08% -0.01% N/A

Irkut Scientifi. / United Aircraft.

1 IRKT = USD0.9364

24 Mar 2008

11 Jun 2008 2 06 Jul 2008

Russia USD-905m 1.23% 0.00% 89.97%

JGC TGK-4 (The . / Onexim Group

1 TGKD = USD0.0011

07 Apr 2008

01 Sep 2008

84 26 Sep 2007

Russia USD-1,453m 0.00% 0.00% 0.00%

Lebedyansky JSC / Bidco for Lebed.

1 LEKZ = USD88.02

20 Mar 2008

06 Oct 2008 119 03 Nov 2008

Russia USD-1,664m 8.00% 0.00% 23.93%

Liberty Holding. / Standard Bank G.

1 LBH = USD28.535

28 May 2008

25 Jul 2008 46 01 Aug 2008

South Africa USD-1,356m 3.29% -0.14% 24.50%

Migros Turk Tic. / Bidco for Migro.

1 MIGRS = EUR12.3728

14 Feb 2008

04 Jun 2008 Completed Turkey EUR-1,893m 16.37% 0.82% N/A

Neochimiki L.V.. / The Carlyle Gro.

1 NEOCHI = EUR19.00

09 May 2008


Greece EUR-684m 0.00% 0.00% N/A

OJSC Power Mach. / Highstat Ltd

1 SILM = USD0.223

28 Nov 2007

10 Jun 2008 1 Russia USD-1,807m 7.47% 0.00% 681.63%




Target Mkt Cap (m)


OJSC Samaraener. / ZAO Financial B.

1 SAGO = USD0.0444

24 Apr 2008

01 Sep 2008

84 26 Sep 2008

Russia USD-128m 22.31% -0.68% 93.62%

Rosbank JSCB / Societe General.

1 ROSB = USD8.0834

03 Mar 2008

26 May 2008


Russia USD-5,758m 1.04% 0.00% N/A

Siyathenga Prop. / Pangbourne Prop.

1 SIY = 0.5588 PAP

25 Feb 2008


South Africa USD-136m -3.37% 0.00% N/A

Terna S.A. / GEK S.A. (aka G.

1 TERR = 0.95 GEK

07 Apr 2008

10 Jul 2008 31 Greece EUR-370m 9.14% 5.42% 98.16%

TGK-10 (Territo. / Fortum Oyj

1 TGKJ = USD4.6319

29 Feb 2008

19 Jul 2008 40 13 Aug 2008

Russia USD-3,330m 1.35% 0.00% 11.50%

TGK-2 (The Seco. / Kores Invest

1 TGKB = USD0.0011

14 Mar 2008

19 Sep 2008

102 Russia USD-1,096m 10.00% -12.22% 34.76%

TGK-8 (Territor. / OAO Lukoil

1 TGKH = USD0.0015

11 Feb 2008

15 Aug 2008

67 09 Sep 2008

Russia USD-2,201m -6.25% 0.00% -32.59%

TGK-9 (Territor. / Integrated Ener.

1 TGKI = USD0.0003

05 Oct 2007

07 Jul 2008 28 01 Aug 2008

Russia USD-1,709m

Tourism Investm. / Bidco for Touri.

1 TRT = USD0.269

24 Apr 2008

15 Aug 2008

67 South Africa USD-204m 9.48% 1.10% 49.45%

Volzhskaya TGK . / Berezville Inve.

1 TGKG = USD0.1198

15 May 2008

03 Sep 2008

86 Russia USD-2,587m 38.82% 0.00% 159.20%

W.Kruk SA / Vistula & Wolcz.

1 KRK = EUR7.215

05 May 2008

14 Jul 2008 35 Poland EUR-89m 49.22% -7.84% 472.81%

Zentiva NV / Anthiarose Limi.

1 ZEN = EUR37.6706

02 May 2008

11 Aug 2008

63 Czech Republic

EUR-1,602m -10.34% -0.57% -57.17%

Live deals – Emerging Europe, Middle East and Africa


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